JUDGMENT : K.S. Jhaveri, J. 1. All these appeals arise out of a common order dated 12.7.2000 passed by the Income-tax Appellate Tribunal (hereinafter referred to as "the Tribunal") whereby the Tribunal has dismissed the appeals of the present appellant-assessee. 2. The facts of the present case are that the assessee is a contractor dealing with the contract with the railway for supply of concrete sleepers for which the assessee has entered into a contract vide letter dated 15.11.1979 where the following terms of contract were made between the parties: "12. Escalation on prices of raw material - The contract rate per monoblock concrete sleeper in terms of clause 2 of the contract is based on the following prices of principal raw material viz., cement & HTS. Special cement Rs. 425/- Per tonne for works station/works siding if any. High Tensile Steel (Strand Wire) Rs. 6300/- Per tonne. If the cost of raw material, as indicated above, is increased or decreased, the contract price shall be correspondingly varied with effect from the date of such increase or decrease by the amount of variation in the prices of principal raw material that may be actually purchased after the relevant date and ruing the period of supply of concrete sleepers subject to a running ceiling of the quantity required for concrete sleepers remaining to be manufactured after the relevant date." 3. Pursuant to the clause as referred to above, the appellant-assessee herein was entitled to the escalated price incurred for supply of special cement and High Tensile Steel (Strand Wire). Accordingly, the assessee has raised its bill with the authorities. The assessee has incurred expenses for the relevant assessment years, namely, assessment years 1984-85, 1985-86 and 1986-87. 4. Learned advocate Mr. Shah for the appellant has taken us to the order of the Tribunal and contended that in view of the decision of the Supreme Court in the case of Calcutta Co. The assessee has incurred expenses for the relevant assessment years, namely, assessment years 1984-85, 1985-86 and 1986-87. 4. Learned advocate Mr. Shah for the appellant has taken us to the order of the Tribunal and contended that in view of the decision of the Supreme Court in the case of Calcutta Co. Ltd. v. Commissioner of Income-tax reported (1959) 37 ITR 1 wherein the Supreme Court dealing with the estimated expenditure which had to be incurred by the assessee under section 10(2) of the Indian Income-tax Act, 1922 in discharging a liability which it had already undertaken under terms of sale-deeds of lands in question was an accrued liability which according to mercantile system of accounting assessee was entitled to debit in its books of account for accounting year as against receipts which represented sale proceeds of said lands. The learned advocate for the appellant contended that the facts of the present case were that the revised bill amount for the relevant year shown as income was received subsequently. Therefore, the assessee has filed revised return and on the basis of that principle his income is to be considered for the relevant year. 5. The learned counsel for the appellant has relied on the decision of the Supreme Court in the case of Bharat Earth Movers v. Commissioner of Income-tax reported in (2000) 245 ITR 428 wherein it was held as follows: "The law is settled: if a business liability has definitely arisen in the accounting year; the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should also be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied, the liability is not a contingent one. The liability is in praesenti though it will be discharged at a future date. It does not make any difference if the future date on which the liability shall have to be discharged is not certain. Applying the principles laid down in Metal Box Co. of India Ltd. v. Their Workmen (1969) 73 ITR 53 (SC) and Calcutta Co. The liability is in praesenti though it will be discharged at a future date. It does not make any difference if the future date on which the liability shall have to be discharged is not certain. Applying the principles laid down in Metal Box Co. of India Ltd. v. Their Workmen (1969) 73 ITR 53 (SC) and Calcutta Co. Ltd. v. CIT (1959) 37 ITR 1 (SC), it must be held that the provision made by the assessee-company for meeting the liability incurred by it under the leave encashment scheme proportionate with the entitlement earned by employees of the company, inclusive of the officers and the staff, subject to the ceiling on accumulation as applicable on the relevant date, would be allowable as deduction out of the gross receipts for the accounting year during which the provision was made for the liability. The liability was not a contingent liability. The High Court was not right in taking a view to the contrary." 6. The learned counsel for the appellant has placed reliance on the decision of the Bombay High Court in the case of Taparia Tools Ltd. v. Joint Commissioner of Income-tax reported in (2003) 260 ITR 102 where the court has observed and held as under: "Whether matching concept in which revenue and income earned during an accounting period, irrespective of actual cash in flow, is required to be compared with expenses incurred during same period, irrespective of actual outflow of cash, is very relevant to compute taxable income, particularly in cases involving DRE - held yes - Whether though ordinarily revenue expenditure incurred only and exclusively for business purposes must be allowed in its entirety in year in which it is incurred, in instant case, Assessing Officer was justified to spread expenditure over life of debentures because allowing entire expenditure in one year might give a distorted picture of profit of a particular year - Held yes." 7. Reliance has been placed on the decision of this court in the case of Amrish & Co. v. Commissioner of Income-tax reported in (2002) 257 ITR 180 (Guj) where it has been held as follows: "As to when a business liability arises is an issue which is no longer res integra. The Supreme Court in the case of Bharat Earth Movers v. CIT, (2000) 245 ITR 428/112 Taxman 61 has laid down the law and a fer principles. The Supreme Court in the case of Bharat Earth Movers v. CIT, (2000) 245 ITR 428/112 Taxman 61 has laid down the law and a fer principles. The relevant principles for the instant case are as follows: "(i) For an assessee maintaining his accounts on the mercantile system, a liability already accrued, though to be discharged at a future date, would be a proper deduction while working out the profits and gains of his business, regard being had to the accepted principles of commercial practice and accountancy. It is not as if such deduction is permissible only in the case of amounts actually expended or paid. (ii) Just as receipts, though not actual receipts but accrued due are brought in for income-tax assessment, so also liabilities accrued due would be taken into account while working out the profits and gains of the business; (iii) A condition subsequent, the fulfillment of which may result in the reduction or even extinction of the liability, would not have the effect of converting that liability into a contingent liability; (iv) A trader computing his taxable profits for a particular year may properly deduct not only the payment actually made to his employees but also the present value of any payments in respect of their services in that year to be made in a subsequent year if it can be satisfactorily estimated." Applying the aforesaid test, it was apparent on the facts of the instant case that the assessee as a trader while computing its taxable profits for the year under consideration was properly required to deduct not only the payments actually made for use of premises and facilities but also the present value of any payments in respect of such use in that year; though payable in a subsequent year in case such liability could be satisfactorily estimated. As already seen, the assessee had given detailed working of the estimated liability for the year under consideration and there was no dispute as regards the same. Furthermore, merely because subsequently there might be a reduction or even extinction of liability, it would not have the effect of converting such accrued liability into a contingent liability." 8. As already seen, the assessee had given detailed working of the estimated liability for the year under consideration and there was no dispute as regards the same. Furthermore, merely because subsequently there might be a reduction or even extinction of liability, it would not have the effect of converting such accrued liability into a contingent liability." 8. Further reliance has been placed on the decision of this court in the case of Commissioner of Income-tax v. Atul Products Ltd. reported in (2002) 255 ITR 85 wherein it has been held as follows: "Looking to the facts of the case, no question of law is arose out of the impugned order passed by the Tribunal. Even the appeals filed by the Revenue deserved to be rejected. There was a finding of fact by the Tribunal to the effect that the change made in the method of stock valuation by the assessee was not with a mala fide intention. Thus, it was very clear that only with a bona fide intention, the assessee had changed the method of stock valuation. It was true that, as a result of the change made in the method of stock valuation, the taxable income of the assessee had been reduced. Any change in any method of stock valuation is bound to make some change in the taxable income. Simply because, by virtue of the change introduced by the assessee, the taxable income of the assessee had been reduced, by no stretch of imagination, it could be said that the assessee had an intention to deliberately undervalue its stock so as to reduce its tax burden. It has been held by the Calcutta High Court in the case of CIT v. Delta Plantation Ltd. (1973) 71 Taxman 329 that when the change is made by an assessee in the method of valuation of stock, so as to follow the method of stock valuation adopted by the entire industry, the revenue should not reject the method, merely because there would be loss to the revenue in the year in which the method of stock valuation was changed. In the instant case, the method had been changed with a bona fide intention so as to have a method which was followed by the entire industry. In the instant case, the method had been changed with a bona fide intention so as to have a method which was followed by the entire industry. Moreover, it had also been held by the instant court in the case of CIT v. Ganga Charity Trust Fund, [1986] 162 ITR 612/29 Taxman 413, that when the accounting method is changed with a bona fide intention, the change should be accepted by the revenue. Looking to the law laid down by several High Courts on the subject-matter, it is very clear that if the method of stock valuation is changed by the assessee and if the change is bona fide, even if the taxable income is reduced on account of the changed method of stock valuation, it is not open to the revenue to add any amount in the taxable income of the assessee which is the resultant effect of the changed method of valuation. There was no reason to deviate from the view which had been expressed by several High Courts including the Gujarat High Court. As stated hereinabove, it was not in dispute that the change was bona fide. The new method which was adopted, had been continuously followed in the subsequent years. The assessee had changed the method so as to see that the method adopted by the assessee was also as per the method adopted by other business units in the industry. It were also pertinent to note that in the subsequent years, the revenue had not objected to the change made by the assessee in the method of stock valuation." 9. The learned counsel for the appellant has further relied on the decision in the case of Commissioner of Income-tax v. Carborandum Universal Ltd., reported in (1984) 149 ITR 759 (Madras) where it was held as under: "The AAC and the Tribunal had both found that the change in the method of valuation of stock from total cost to direct cost was bona fide and intended to be followed from year to year and that it was not restricted for any particular period. This finding had not been challenged by the revenue. Consequently, the assessee was entitled to change the method of valuation of stock from total cost to 'direct cost'. This finding had not been challenged by the revenue. Consequently, the assessee was entitled to change the method of valuation of stock from total cost to 'direct cost'. The revenue's main contention was that the new method should be applied both to the closing and opening stock of the year in order to get a true picture of the assessee's profits, was also correctly rejected by the Tribunal. If the assessee was called upon to apply the new method of valuation to the opening stock as well, then in consequence thereof, the value of the closing stock of the preceding year would also get altered, calling for a modification of the assessment for the preceding year. Thus, if the revenue's stand were to be accepted, it would lead to the position that the assessee would not be able to change the method at all. Merely because the new method adopted by the assessee was detrimental to the revenue, the assessee could not be denied the right to change the method. Moreover, as pointed out by the Tribunal, the apparent detriment to the revenue in the current year could get adjusted and would disappear in course of time, as the new method was to be followed consistently from year to year. So long as the method of valuation adopted by the assessee got recognition from the practising accountants and the commercial world, the adoption of that method could not be quashed by the revenue unless the adoption of that method, was found to be not bona fide or restricted for a particular year. The Tribunal's decision as thus, correct." 10. The decision of the Bombay High Court in the case of Taparia Tools Ltd. (supra) has been carried to the Supreme Court. The Supreme Court in the case of Taparia Tools Ltd. vs. Joint Commissioner of Income-tax, Special Range-I, Nasik reported in (2015) 55 Taxmann.com 361 (SC) has observed in paragraph Nos. 18 to 19 thus: "18. What follows from the above is that normally the ordinary rule is to be applied, namely, revenue expenditure incurred in a particular year is to be allowed in that year. Thus, if the assessee claims that expenditure in that year, the IT Department cannot deny the same. 18 to 19 thus: "18. What follows from the above is that normally the ordinary rule is to be applied, namely, revenue expenditure incurred in a particular year is to be allowed in that year. Thus, if the assessee claims that expenditure in that year, the IT Department cannot deny the same. However, in those cases where the assessee himself wants to spread the expenditure over a period of ensuing years, it can be allowed only if the principle of 'Matching Concept' is satisfied, which upto now has been restricted to the cases of debentures. 19. In the instant case, as noticed above, the assessee did not want spread over of this expenditure over a period of five years as in the return filed by it, it had claimed the entire interest paid upfront as deductible expenditure in the same year. In such a situation, when this course of action was permissible in law to the assessee as it was in consonance with the provisions of the Act which permit the assessee to claim the expenditure in the year in which it was incurred, merely because a different treatment was given in the books of account cannot be a factor which would deprive the assessee from claiming the entire expenditure as a deduction. It has been held repeatedly by this Court that entries in the books of account are not determinative or conclusive and the matter is to be examined on the touchstone of provisions contained in the Act [see: Kedarnath Jute Manufacturing Co. Ltd. v. Commissioner of Income-tax (Central), Calcutta, (1972) 3 SCC 252 ; Tuticorin Alkali Chemicals & Fertilizers Ltd., Madras v. Commissioner of Income-tax, Madras, (1997) 6 SCC 117 ; Sutlej Cotton Mills Ltd. v. Commissioner of Income-tax, Calcutta, (1978) 4 SCC 358 ; and United Commercial Bank, Calcutta v. Commissioner of Income-tax, WB-III, Calcutta, (1999) 8 SCC 338 ]. 20. At the most, an inference can be drawn that by showing this expenditure in a spread over manner in the books of account, the assessee had initially intended to make such an option. However, it abandoned the same before reaching the crucial stage, inasmuch as, in the income-tax return filed by the assessee, it chose to claim the entire expenditure in the yar in which it was spent/paid by invoking the provisions of section 36(1)(iii) of the Act. However, it abandoned the same before reaching the crucial stage, inasmuch as, in the income-tax return filed by the assessee, it chose to claim the entire expenditure in the yar in which it was spent/paid by invoking the provisions of section 36(1)(iii) of the Act. Once a return in that manner was filed, the AO was bound to carry out the assessment by applying the provisions of that Act and not to go beyond the said return. There is no estoppel against the Statute and the Act enables and entitles the assessee to claim the entire expenditure in the manner it is claimed." 11. The learned counsel for the appellant has relied on the decision of this court in the case of Commissioner of Income-tax vs. Unique Mercantile Service (P) Ltd., reported in (2015) 56 Taxmann.com 429 (Gujarat) in which it is held as under: "In view of the aforesaid discussion, the Tribunal has rightly considered that the method of accounting should be such from which the correct profit of each year can be deducted and that as per the method adopted by the revenue, the profit in the year in which the card is issued would be more resulting in loss/less profit in the year in which the services will be rendered by the assessee. When the services are rendered partially, revenue is to be shown proportionate to the degree of completion of the service and therefore, the assessee was justified in spreading over the amount of membership fee and expenses." 12. The learned counsel for the appellant has, therefore, contended that the Tribunal has committed error in confirming the action of the lower authorities in holding that the amount received under escalation claims from the Western Railway and credited when received in the books of account were correctly taxed in the year in which the same were credited. 13. Learned advocate Mr. Shah has fairly conceded that the order of the Commissioner of Income-tax (Appeals) is not with him and actually the order of the Assessing Officer is produced on record which is attached along with letter dated nil. He has sought permission to replace the order which was produced on record for assessment year 1987-88. The order of Commissioner of Income-tax (Appeals) is not with him and the present contention he has relied on for the first time before the Tribunal. 14. Learned counsel Mr. He has sought permission to replace the order which was produced on record for assessment year 1987-88. The order of Commissioner of Income-tax (Appeals) is not with him and the present contention he has relied on for the first time before the Tribunal. 14. Learned counsel Mr. Parikh for the respondent has taken us through paragraph No. 9 at page 20 of the order of the Tribunal and contended that the assessee has changed the method of accounting and while considering the case of the appellant in paragraph No. 7 at page 18, the Tribunal has rightly observed as under: "The learned counsel further submitted that even though the assessee had been earlier filing the returns without showing the escalation claims, it had revised the return for A.Ys. 1984-85 and the escalation claims have been included in the years to which the same pertained and this change of method of accounting would be accepted by the A.O." It is contended that this contention was raised for the first time before the Tribunal which cannot be accepted. 15. We have heard learned advocate Mr. Shah for the appellant and learned counsel Mr. Parikh for the respondent. Before proceeding further with the judgment, we accept the principle which has been sought by learned advocate Mr. Shah for the appellant but on the facts of the present case when the assessee has shown the expenses, ultimately the assessee has not shown the amount which he is entitled to receive in the books of account. The assessee has not even shown the outstanding balance anywhere in the books of account. The assessee has relied on clause 12 of the contract as referred to above and subsequently it has credited the escalation payments after the claims sanctioned and payments have been received from the railways. Though the expenses are claimed at the relevant year, the assessee has not shown the same in the books of account. In our view the principles sought to be relied on by the assessee are for the expenses incurred and not for the income. The assessee has to show in the books of account the expenses incurred or future income or bill outstanding from the railway. This has not been done. We are, therefore, in complete agreement with the view taken by the Tribunal. The appeals, therefore, deserve to be dismissed and accordingly, the same are dismissed.